PSA Japan Research Round-Up for the Week to Nov 22, 2018 – Labour Thanksgiving Day on Friday, Nov 23

The Weekly Comment by Joel Scheiman
Tariff matters, company earnings and forecasts as we end this results season, plus reactions to Apple’s weak production figures have dominated moves in this shortened, Labour Thanksgiving Day week. Tariff matters, company earnings and forecasts as we end this results season, plus reactions to Apple’s weak production figures have dominated moves in this shortened, Labour Thanksgiving Day week.
Reports / Flash Notes Summaries
1. Carlos Ghosn Arrested – Concern Over Future of Alliance. Implications for Nissan (7201 JT) and MMC (7211 JT)
2. Nissan and The Future of the Alliance / Nissan: How to Rebalance the Capital Structure without Putting off Investors
3. Value Implosion in the Japanese Video Game Sector
4. Daifuku (6383 JT) Order Visibility Play
5. ZOZO Product Review – ZOZO Jeans and T-shirt Review
Company / Sector / Thematic Comments
Technology: Consumer Electronics / Gaming / Electronic Components
1. Nexon(3659 JT) in China
2. Value Implosion in the Japanese Video Game Sector
3. Positive Feedback from our Visit to Harmonic Drive Systems (6324 JT)
Chemicals / Materials
4. Fujimi (5384 JT): FY18 Guidance Looks Conservative
5. Hoya’s (7741 JT) Strategy to Expand Intraocular Lens Sales
6. Sumitomo Metal Mining (5713 JT): Focus on Nickel
Autos
7. Breaking News for Nissan (7201 JT) – the Carlos Ghosn Scandal
8. Volkswagen (VOW GR) Announces Major Investment into Electric Vehicles
9. Subaru (7270 JT) Introduces Crosstrek Plug-in Hybrid, New Forester
Auto Parts / Machinery
10. Fanuc (6954 JT) President Suggests China Capex Recovery at Least 6-Months, Maybe 1~2 Years Away”
11. Commodities Weakness Good for Daikin (6367 JT)
Internet /eCommerce
12. GungHo (3765 JT) Rises for the First Time This Week Amid a Sector Recovery
13. CyberAgent (4751 JT) to Broadcast Another Special Reality Program
14. ZOZO (3092 JT) to Sponsor PGA TOUR

PSA Company Visits, Tours and Interviews
• Attended earnings meeting at Kanto Denka (4047 JT)
• Attended information meeting at Sumitomo Chemical (4005 JT)
• Interviewed / Conference Call with Daifuku (6383 JT), Ichikoh (7244 JT), TIS Inc (3626 JT), PKSHA Technology (3993 JT)
• Visited Harmonic Drive Systems (6324 JT), Nexon (3659 JT), RIZAP Group (2928 JT), Otsuka Holdings (4578 JT), Hoya (7741 JT), TDK (6762 JT), Fujifilm Holdings (4901 JT)
PSA in the Press
Autos analyst Julie Boote is in high demand with interviews with the Wall Street Journal, Bloomberg TV and Sky News with Ian King regarding the arrest of Carlos Ghosn and the implications for the alliance.
/articles/analysis-ghosns-departure-would-leave-vacuum-at-worlds-largest-auto-alliance-1542634804?mod=hp_major_pos14
/news/videos/2018-11-20/-bloomberg-daybreak-americas-full-show-11-20-2018-video (clip on 29th minute)
/video/ghosn-a-charismatic-and-controversial-figure-11558995

Weekly Market Comment by Joel Scheiman
Tokyo took its lead from US markets day by day this week. The Nikkei Index closed up on Monday, which reflected the advance by Wall Street the previous Friday. When US markets reopened however, investors took note of the discord between US Vice President Mike Pence and Chinese President Xi Jinping at the Asia Pacific Economic Co-operation summit, which reignited fears of an extended trade war. Reports suggested that the US intended to use the summit to gain support to overhaul the World Trade Organization (WTO) and its rules, something which China could hardly condone. By midweek the US Dow and S&P Indexes had erased their gains for the year and slid into negative territory, while risk perception this time focused on an economic slowdown as opposed to rising US interest rates.